A Handbook of Human Resource Management Practice

the joint and continuing review of achievements against objectives, requirements and
plans.
But it is also concerned with inputs and values. The inputs are the knowledge,
skills and behaviours required to produce the expected results. Developmental needs
are identified by defining these requirements and assessing the extent to which the
expected levels of performance have been achieved through the effective use of
knowledge and skills and through appropriate behaviour that upholds core values.
Performance management is a continuous and flexible process, which involves
managers and those whom they manage acting as partners within a framework that
sets out how they can best work together to achieve the required results. It is based
on the principle of management by contract and agreement rather than manage-
ment by command. It relies on consensus and co-operation rather than control or
coercion.
Performance management focuses on future performance planning and improve-
ment rather than on retrospective performance appraisal. It functions as a continuous
and evolutionary process, in which performance improves over time. It provides the
basis for regular and frequent dialogues between managers and individuals about
performance and development needs. It is mainly concerned with individual perfor-
mance but it can also be applied to teams. The emphasis is on development, although
performance management is an important part of the reward system through the
provision of feedback and recognition and the identification of opportunities for
growth. It may be associated with performance or contribution-related pay, but its
developmental aspects are much more important.

UNDERSTANDING PERFORMANCE MANAGEMENT

There are five issues that need to be considered to obtain a full understanding of
performance management:

1. the meaning of performance;


2. the significance of values;


3. the meaning of alignment;


4. managing expectations;


5. the significance of discretionary behaviour.

The meaning of performance

Performance is often defined simply in output terms – the achievement of quantified

The basis of performance management ❚ 497